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Oil Prices Drift Lower

Crude oil prices are drifting lower on Thursday, after a report from the International Energy Agency said crude output by OPEC members rose in November on the back of record pumping from Saudi Arabia.

The report said OPEC output increased by 100,000 barrels a day on month to 33.03 million barrels a day in November. Saudi Arabia produced an additional 410,000 barrels a day in the month, taking the kingdom's total production in the month to a historic high of 11.06 million barrels a day.

With high level of production for Saudi Arabia and the U.A.E. offsetting declines in Iran, there is excess supply in the market.

Meanwhile, OPEC's monthly report released yesterday, shows a slight decline in the cartel's output in November.

Last week, the OPEC and non-OPEC members agreed to cut production by 1.2 million barrels a day starting in January.

Crude oil futures for January are down $0.64, or 1.25%, at 50.51 a barrel.

On Wednesday, crude oil futures for January delivery ended down $0.50, or 1%, at 51.15 a barrel, well off the session's high of 52.84 a barrel.

The IEA report says, "The agreement aims to achieve relative stability and to bring the market toward balance. So far, the Brent crude oil price seems to have found a floor, remaining close to $60 a barrel."

The IEA said total global oil supply in November fell by 360,000 barrels a day on month, as a result of outages in the North Sea and Canada, as well as a decline in Russian output.

And, the agency kept its oil demand growth forecasts for this year and next unchanged, at 1.3 million barrels a day and 1.4 million barrels a day, respectively.

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